The so-called Grayscale effect might be waning, as both bitcoin (BTC) and ethereum (ETH) are rallying despite inflows in the two largest Grayscale’s trusts have slowed down. (Updated at 15:51 UTC: updates throughout the entire text – contrary to what was previously reported, Grayscale stressed there are no outflows from their trusts, as they do not offer redemption programs, while the popular industry source, bybt.com, explained that “outflows” in their charts are related to how Grayscale deducts their annual fee.)

In the past 7 days, only BTC 3.26 (USD 177,000) entered the Grayscale Bitcoin Trust (GBTC), while the Grayscale Ethereum Trust (ETHE) received almost ETH 420 (USD 765,000), per bybt.com data. In the same period of time, the price of BTC jumped by 9%, while ETH rallied by 16%.

Just two months ago, strategists at the major investment bank JPMorgan said that Grayscale trusts could be a determining factor in whether the cryptos’ prices go up or down, as losses could be fuelled by the “trend-following investors” leaving the space.

The highest recorded inflow in a single day was BTC 16,240 on January 18.

Meanwhile, ETH inflows surpassed BTC’s after the ETHE reopened in February. Since then, nearly ETH 245,410 (USD 447m) entered it. In the same period, BTC 7,404.13 (USD 403m) entered the GBTC.

However, Grayscale BTC holdings are much larger, standing at BTC 655,430 (USD 35.7bn), while it has ETH 3.17m (USD 5.8bn).

Meanwhile, inflows into litecoin (LTC), bitcoin cash (BCH), and ethereum classic (ETC) have increased in the past week. In the market, LTC price is up by 13% in a week, BCH – 6.5%, while ETC increased by 8%.

As reported, Grayscale recently confirmed that they’re looking into at least 23 different digital assets “for potential new product offerings.”

While other trusts, such as Bitwise, BlockFi, Osprey Bitcoin Trust, and Canadian Bitcoin exchange-traded funds (ETFs) are emerging, the Grayscale trusts have so far been a dominant way for institutional investors to enter the cryptoverse.

The trusts are structured to hold the underlying crypto, while the value of each share is dependent on the amount of crypto under management. They also provide a familiar structure for accounting and taxation. However, there is no way to redeem the underlying crypto.

“The lack of redemption options plus high institutional demand has created an interesting side effect: crypto trusts are becoming large supply sinks that lock up cryptoassets and effectively take them out of circulation, reducing the overall liquid supply,” crypto intelligence firm Coin Metrics noted recently.

BTC’s free float supply is about 14.55m and the GBTC alone effectively removes an additional BTC 650,000 from circulating supply, per the firm’s data.

At the time of writing (15:37 UTC), BTC trades at USD 54,380 and is up 6% in a day, while ETH jumped by 4%, to USD 1,822.